Ch 2: Consumer-based segmentation

market segmentation

market segmentation dividing the mass market into subsets of consumers who share common needs, characteristics, and behaviors, and targeting one or more with a district marketing mix

three types of segmentation strategies

• mass marketing: all consumers are offered the same product and marketing mix

• differentiated: identify relatively large segments who differ from other segments needs

• niche: identify relatively small segments who share specific needs or want

target marketing

target marketing the segments to which a firm’s marketing efforts are directed

posting

posting differentiates a product from competitors and convey how the product satisfies consumers need. This happens through the marketing mix

common bases of segmentation

• demographic: descriptive population stats

• geographic: location

• psychographic: what kind of people are they

• behavioral: based on purchase history and usage

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VALS framework

VALS framework is a psychographic segmentation that categories consumers based on low/high resources (money) and primary motivation

types of motivation:

• Ideals: driven by knowledge and impact

• Achievers: driven by status and visible reward

• Self-expression: driven by experience and in the moment

value-pain segmentation

type of behavioral segmentation that segments customers based how much value they perceive and hoe much pain they feel

price segment

price segment (high pain- low value) is when customers feel the price is not worth it. They are sensitive to the cost, friction, or effort

Focus on reduce barriers, lower perceived risk

value segment

value segment (high pain - high value) is when customers see the strong value but still feel friction

Focus on justify the pain, highlight ROI

convince segment

convince segment (low pain - low value) is when the customer does not see a lot of value but its easy

focus: speed, ease, and “no hassle”

loyal segment

loyal segment (low pain - high value) is when customers love the offering and they feel no friction

focus on deepen emotional connection, reward, loyalty, reinforce identity

forwards STP marketing and flaws

identify consumer needs and wants → design products that meet needs/wants → wait for the purchase behavior

• limitations:

  • people are awful at describing what they want

  • the correlation between attiudes and purchases behavior is weak

backwards STP marketing

observe different purchase behaviors → understand the needs/wants → market accordingly